HQ 109708: Pipe laying by a foreign vessel on the outer Continental Shelf

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                       HQ 109708

                                   October 19, 1988

            VES-3-16 CO:R:P:C 109708 DHR

            CATEGORY:  Carriers

            John W. McConnell, Esq.
            Haight, Gardner, Poor & Havens
            2828 Pennsylvania Avenue, NW.
            Washington D.C. 20007

            RE:  Pipe laying by a foreign vessel on the outer Continental
            Shelf

            Dear Mr. McConnell:

                 This is with reference to your letter of August 22, 1988,
            concerning the laying of pipe on the outer Continental Shelf.

            FACTS:

                 The owner of a Panamarian-flag vessel plans to bid on
            laying pipe between structures on the outer Continental Shelf.
            The pipe would be loaded on board in a U.S. port and laid on
            the outer Continental Shelf between structures which are on the
            seabed for the purpose of exploring for or producing mineral
            resources and/or an existing pipeline.  Upon completion of the
            pipelaying, any pipe and pipe laying equipment will be
            transported back to the point of loading on a barge qualified
            to engage in coastwise transportation.

            ISSUE:

                 (1) Whether the proposed pipelaying activities, as
            described, would be in violation of 46 U.S.C. 883 or any other
            law.

                 (2) Whether the persons on the vessel who are to carry out
            welding and pipelaying are "passengers" as that term is used in
            46 U.S.C. 289 or any other law.

            LAW AND ANALYSIS:

                 (1) Section 883, title 46, United States Code, prohibits,
            with exceptions not relevant here, a foreign-built or foreign-
            flag vessel from transporting merchandise between points
            embraced within the coastwise laws of the United States.  The
            Customs Service has held that the paying out of pipe in the











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            course of laying it on the sea bed is not a "transportation"
            within the meaning of section 883.  The legitimate stores and
            equipment of a vessel, including, in the case of a pipelaying
            vessel, material and articles necessary for the laying of pipe,
            are not considered to be "merchandise" within the meaning of
            section 883.

                 (2) Pursuant to section 4.50(b) of the Customs Regulations
            (19 CFR 4.50(b)) a passenger is any person who is carried on a
            vessel who is not connected with the vessel's ownership,
            navigation, operation, or business.  As the persons who are on
            the vessel to lay the pipe and to engage in related activities
            are certainly connected with the business of the vessel, such
            persons would not be considered passengers.

            HOLDING:

                 The Customs Service administers no law which would
            prohibit the pipelaying operation on the outer Continental
            Shelf, as described in your letter of August 22, 1988.

                                         Sincerely,




                                         B. James Fritz
                                         Chief,
                                         Carrier Rulings Branch

















            CO:R:P:C:DREUSCH:rk:10/12/88